Bare bones—These relationships require more adaptation by the seller and less cooperation

Marketing Insight Marketing Insight Establishing Corporate Trust, Credibility, and Reputation Corporate credibility is the extent to which customers believe a firm can design and deliver products and services that satisfy their needs and wants. It reflects the supplier’s reputation in the marketplace and is the foundation for a strong relationship. Corporate credibility depends on three factors: • Corporate expertise —the extent to which a company is seen as able to make and sell products or conduct services. • Corporate trustworthiness —the extent to which a company is seen as motivated to be honest, dependable, and sensitive to customer needs. • Corporate likability —the extent to which a company is seen as likable, attractive, prestigious, dynamic, and so on. In other words, a credible firm is good at what it does; it keeps its customers’ best interests in mind and is enjoyable to work with. Trust is the willingness of a firm to rely on a business partner. It depends on a number of interpersonal and interorganizational factors, such as the firm’s perceived competence, integrity, honesty, and benevolence. Personal interactions with employees of the firm, opinions about the com- pany as a whole, and perceptions of trust will evolve with experience. A firm is more likely to be seen as trustworthy when it: • Provides full, honest information • Provides employees incentives that are aligned to meet with customer needs • Partners with customers to help them learn and help themselves • Offers valid comparisons with competitive products Building trust can be especially tricky in online settings, and firms often impose more stringent requirements on their online business part- ners than on others. Business buyers worry that they won’t get products of the right quality delivered to the right place at the right time. Sellers worry about getting paid on time—or at all—and how much credit they should extend. Some firms, such as transportation and supply chain management company Ryder System, use automated credit-checking applications and online trust services to determine the creditworthiness of trading partners. Sources: Bob Violino, “Building B2B Trust,” Computerworld, June 17, 2002, p. 32; Richard E. Plank, David A. Reid, and Ellen Bolman Pullins, “Perceived Trust in Business-to-Business Sales: A New Measure,” Journal of Personal Selling and Sales Management 19, no. 3 Summer 1999, pp. 61–72; Kevin Lane Keller and David A. Aaker, “Corporate-Level Marketing: The Impact of Credibility on a Company’s Brand Extensions,” Corporate Reputation Review 1 August 1998, pp. 356–78; Robert M. Morgan and Shelby D. Hunt, “The Commitment–Trust Theory of Relationship Marketing,” Journal of Marketing 58, no. 3 July 1994, pp. 20–38; Christine Moorman, Rohit Deshpande, and Gerald Zaltman, “Factors Affecting Trust in Market Research Relationships,” Journal of Marketing 57 January 1993, pp. 81–101; Glen Urban, “Where Are You Positioned on the Trust Dimensions?” Don’t Just Relate-Advocate: A Blueprint for Profit in the Era of Customer Power Upper Saddle River, NJ: Pearson EducationWharton School Publishers, 2005.

7. Mutually adaptive—Buyers and sellers make many relationship-specific adaptations, but

without necessarily achieving strong trust or cooperation.

8. Customer is king—In this close, cooperative relationship, the seller adapts to meet the

customer’s needs without expecting much adaptation or change in exchange. Over time, however, relationship roles may shift or be activated under different circumstances. 59 Some needs can be satisfied with fairly basic supplier performance. Buyers then neither want nor require a close relationship with a supplier. Likewise, some suppliers may not find it worth their while to invest in customers with limited growth potential. One study found the closest relationships between customers and suppliers arose when the supply was important to the customer and there were procurement obstacles, such as complex purchase requirements and few alternate suppliers. 60 Another study suggested that greater vertical coordination between buyer and seller through information exchange and planning is usually necessary only when high environmental uncertainty exists and specific investments described next are modest. 61 Business Relationships: Risks and Opportunism Researchers have noted that establishing a customer–supplier relationship creates tension between safeguarding ensuring predictable solutions and adaptation allowing for flexibility for unanticipated events. Vertical coordination can facilitate stronger customer–seller ties but at the same time may increase the risk to the customer’s and supplier’s specific investments. Specific investments are those expenditures tailored to a particular company and value chain